I've just finished doing a board assessment for a small fund management organisation.
I can't say anything about it, other than to note that I think my client found it useful, particularly in raising their self-awareness about what was going on.
It also seems to be part of a growing trend. SHRM's HR Magazine runs an article in its July edition, Sizing Up Board Members, and notes that although only 15% of companies conducted individual board member reviews in 2006, the trend if poised to skyrocket. The article also notes the benefits of using outside experts to add objectivity and defuse the awkwardness of peer reviews. It includes the following comment from Caroline Nahas at Korn/Ferry:
"When you embark on this for the first time, it's helpful to have a third party. The person can provide insight into best practices because he has been exposed to a number of different boards. He can provide advice for building a framework for the process."
Any more takers?
Writing in the FT (Boards deserve credit for taking evaluation seriously), http://www.ft.com/cms/s/0/45253ab0-4eb5-11dc-85e7-0000779fd2ac.html, Richard Sheath, Director at Independent Audit finds that annual board evaluations have become near-universal practice. In addition, many boards are now actively moving into the next phase, looking for the most effective ways to evaluate their performance by going beyond compliance checks.
ReplyDeleteIt's good to see board evaluation progressing beyond value-for-money, but I don't personally see this many boards doing it.
Also, Bob Garratt from CASS challenges how effective many of these evaluations really are (True review of a board's dynamics), http://www.ft.com/cms/s/0/e47028ac-5110-11dc-8e9d-0000779fd2ac.html.
He asks how many boards "are now using the first seven principles of the 2003 Combined Code of Corporate Governance as best practice for their board development and evaluation? Remember that this asks for the annual evaluation of the board, each of its committees and each individual director. Second, there is a growing movement in the past six months for the most performance-focused boards to grasp seriously the nettle of individual director development. Until now most individual directors have been subject to a fairly superficial annual review, often by "a quick word from the chairman". However, there are now signs of a move from the general focus on investor protection/ compliance-only evaluation towards truly reviewing the board's dynamics and the consequent individual director's positive and negative contributions round the boardroom table. This is linked directly to the performance of the total business. There is a growing acceptance of behavioural science being used to provide the necessary measures to do this rigorously."